Tag Archives: credit card

How College Students Can Start Establishing Credit

College is a time for many firsts: living away from home, meeting different people and learning new things. It’s also a time to start setting yourself up for financial success after graduation. Begin by establishing credit.

Why it’s Important
Having good credit helps you rent an apartment, get a loan or mortgage and even get a cell phone plan. Your credit score reflects your credit history. The most common is the Fair Isaac Corp. FICO score, which runs on a scale from 300 to 850, with 850 signifying the best credit.

Student Credit Cards
As paradoxical as it might sound, it takes credit to build credit. Issuers such as Harris County Federal Credit Union understand that students might not have the history it takes to get a credit card. If you earn income, you can apply for a student credit card on your own. If not, you might be able to get one as long as you have a co-signer, such as a parent, to guarantee that the bills will be paid.

With a slew of cards on the market, it’s hard to know which one to choose. An ideal first card has these features:

No annual fee. Some rewards cards charge yearly fees, but there are plenty with no annual fee. As a student, you’re probably strapped for cash, so there’s no need to pay extra charges if you don’t have to.

Getting paid to spend sounds too good to be true, but many student credit cards offer rewards for things students spend a lot on: restaurants, textbooks and entertainment.

Low rate. If you think you’ll carry a balance on your card, look for one that charges a low interest rate. If you know you’ll pay off the balance each month, you won’t have to pay interest, so it’s okay to get a card with a higher rate.

Use it responsibly. Once you have a card, you’re not off the hook yet. You have to use it correctly to build good credit.

Make prompt payments. Payment history is the largest contributing factor in your credit score. So pay at least the minimum by the due date.

Don’t max it out. How much of your available credit you actually use also affects your score. To keep your debt-to-credit ratio low, only use about 30% of your card’s limit. For example, if the limit is $1,000, only charge about $300 at a time.

Keep it open. Even if you aren’t using it, don’t close your account. This helps improve the length of your credit history, which is also considered in calculating your score.

Avoid multiple applications. Applying for a new card triggers a credit inquiry and can lower the average age of your credit accounts. A lot of applications over a short period of time can damage your score.

Diversify your credit. The types of credit you use contribute to 10% of your score. Credit cards, auto and student loans can help diversify your record.

Be patient. Building credit takes time, but if you start as a student and compile a good track record, you’ll be well equipped by the time you graduate.

Teddy Nykiel, NerdWallet

10 Tips to Help Deter Identity Theft

Identity theft can occur so easily, and in such a variety of ways – over the Internet, through mail theft, from information taken out of your trashcan or from a stolen wallet. With nothing more than your Social Security number, a thief can destroy your good credit by opening fraudulent credit accounts, applying for loans or even buying a car.

Your best defense is to stay current on the ways in which identity theft is committed, and then make modifications in your lifestyle to avoid becoming a victim. You’ll find most of these points are simple and inexpensive to implement. And once you make them part of your routine you can rest much easier.

  1. Minimize what you carry in your wallet or purse in case it is stolen. Your Social Security card should be the first thing to go into a secure location. You don’t need it on a day-to-day basis. Receipts for charged purchases or ATM transactions contain valuable information, and should be cleared out as often as possible. Look through the cards you carry, and remove any that you don’t use often. If you normally carry a checkbook, you may consider carrying only a few checks at a time.
  2. Review your checking account and credit card statements regularly. This is where you will spot discrepancies that could indicate identity theft. For many people this is not routine, but once you get in the habit, it goes quicker each month. The time you spend balancing your checking account or reviewing your credit card statement is nothing compared to the time and expense it takes to deal with identity theft.
  3. Get a copy of your credit report annually, and review it carefully. If you spot new accounts that you don’t remember opening, this could indicate identity theft. Check them out immediately. You may also notice old accounts you had forgotten. Take the time to close them. Your credit report will look better in the future should you choose to apply for additional credit. To order a free annual copy go to www.annualcreditreport.com or call 877-322-8228
  4. Be aware that a merchant cannot require you to present a photo ID in order to complete a card transaction. If your credit or debit card is in good condition, the expiration date is valid, the card is signed and your signature on the sales draft matches the signature on your card, no other ID should be required. If for some reason you are asked for an ID, do not permit the merchant to copy any of the information from your ID onto the sales draft.
  5. Install a locked mailbox at your residence for incoming mail, or get a Post Office box. An unsecured mailbox is like a welcome mat for an identity thief. What they’re looking for are credit cards and checks that come to you in the mail. Another hot item is credit card solicitations that thieves could try to accept in your name. Even your bills provide account numbers that could be used to your disadvantage.
  6. Place outgoing mail in a USPS drop box. Outgoing mail is just as enticing to a thief, who will commonly steal outgoing mail looking for account numbers on your bills. Your checks can be altered and then used for cash, and your checking account number can be used to access your account.
  7. Purchase a paper shredder. They aren’t expensive. Shred all documents containing private information before putting them in the trash. This includes pre-approved credit offers that come to you in the mail. Any charge receipts that you are going to throw away should be shredded. Many merchants still print your entire account number and card expiration date on the receipt. (In many states there are laws prohibiting this, but merchants have been slow to respond.) If you need to save a receipt, be sure to mark over the account number, or at least all but the last four digits.
  8. If you shop online, check out www.bbbonline.com/consumer to locate companies that live up to the standards of the Better Business Bureau. Or check the sites you use for the BBB OnLine Reliability Seal, which labels a safe shopping site. Be very cautious about the information you give out online. Protect your Social Security number by not providing it online. It should never be needed to complete a purchase.
  9. Avoid account passwords like your birth date, mother’s maiden name or any part of your Social Security number. These are easy for someone else to obtain and therefore could compromise the security of your account. Pick something that’s easy for you to remember, but something that’s not easy to obtain, (perhaps a nickname, pet’s name or best friend’s birth date.)
  10. Be careful about the information you disclose over the phone. Never provide personal information unless you initiated the call, and are certain you are dealing with a reputable party. Remember that cell phones and cordless phones are vulnerable to eavesdropping because the signals are transmitted over radio waves.

– Vantiv Consumer Info